Nationstar v Brown – Statute of Limitations No Defense Against Foreclosure

Statute of Limitations Applies to Whole Payment Stream

By Bob Hurt, 18 September 2015

Florida’s 1st District Appellate Court gave Germaine and Andrea Brown a rude awakening by telling them the Florida foreclosure 5-year statute of limitations does not apply a 30-year stream of mortgage payments even after the creditor accelerates the loan, making the entire balance immediately due and payable.  The panel cited the Florida Supreme Court opinion in Singleton v Greymar (2004) as the controlling authority (“the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship.”).  The panel held that “the subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.”  In other words, every default of a scheduled payment provides a new right to sue, throughout the original term of the loan.

The panel admitted that Florida’s 3rd District had reached a contrary conclusion in Deutsche Bank v Beauvais (2014).  But the panel harked to the USDC adverse opinion in Stern v BOA (2015) which claimed that Beauvis opinion went against ”overwhelming weight of authority.”  Now the Beauvais court plans to review its decision.

This should make it abundantly clear that the foreclosure statute of limitations in Florida does not constitute a valid defense against foreclosure, except on payments more than 5 years overdue on which the creditor has failed to take action.

Why should this matter to mortgage victims facing foreclosure?  Because you cannot depend on Foreclosure Defense to defeat foreclosure.  The court/trustee will NOT give you a free house.

ONLY ONE methodology gives home loan borrowers a reliable chance beat the appraiser, mortgage broker, title company, servicer, and creditor in a mortgage dispute:  MORTGAGE ATTACK.  Borrowers must ATTACK THE VALIDITY OF THE LOAN, and to do that, they must get a comprehensive mortgage examination.

If you have a mortgage dispute, contact Mortgage Attack NOW for a full explanation of the ONLY WINNING METHODOLOGY.

Mortgage Attack Logo


NATIONSTAR MORTGAGE, LLC v. Brown, Fla: Dist. Court of Appeals, 1st Dist. 2015

https://scholar.google.com/scholar_case?case=9222404951266369639

NATIONSTAR MORTGAGE, LLC, Appellant,
v.
GERMAINE R. BROWN a/k/a GERMAINE R. BROWN; ANDREA E. BROWN, Appellees.

Case No. 1D14-4381.

District Court of Appeal of Florida, First District.

Opinion filed August 24, 2015.

Nancy M. Wallace of Akerman LLP, Tallahassee; William P. Heller of Akerman LLP, Fort Lauderdale; Celia C. Falzone of Akerman LLP, Jacksonville, for Appellant.

Jared D. Comstock of John F. Hayter, Attorney at Law, P.A., Gainesville, for Appellees.

KELSEY, J.

Appellant challenges a final summary judgment holding that the statute of limitations bars appellant’s action to foreclose the subject mortgage. We agree with appellant that the statute of limitations did not bar the action. Thus, we reverse.

It is undisputed that appellees have failed to make any mortgage payments since February 2007, the first month in which they defaulted. In April 2007, appellant’s predecessor in interest gave notice of its intent to accelerate the note based on the February 2007 breach, and filed a foreclosure action. However, the trial court dismissed that action without prejudice in October 2007, after counsel for the lender failed to attend a case management conference.

The next relevant event occurred in November 2010, when appellant sent appellees a new notice of intent to accelerate, based on appellees’ breach in March 2007 and subsequent breaches. Appellees took no action to cure the default, and appellant filed a new foreclosure action in November 2012. Appellees asserted the statute of limitations as an affirmative defense, arguing that the new action and any future foreclosure actions were barred because they were not filed within five years after the original 2007 acceleration of the note. § 95.11(2)(c), Fla. Stat. (2012) (establishing five year statute of limitations on action to foreclose a mortgage).

The principles set forth in Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), apply in this case. In Singleton, the Florida Supreme Court recognized “the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship.” 882 So. 2d at 1007 (emphasis added). The court sought to avoidboth unjust enrichment of a defaulting mortgagor, and inequitable obstacles “prevent[ing] mortgagees from being able to challenge multiple defaults on a mortgage.” Id. at 1007-08. Giving effect to those principles in light of the continuing obligations of a mortgage, the court held that “the subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.” Id. at 1008. The court found it irrelevant whether acceleration had been sought in earlier foreclosure actions. Id. The court’s analysis in Singleton recognizes that a note securing a mortgage creates liability for a total amount of principal and interest, and that the lender’s acceptance of payments in installments does not eliminate the borrower’s ongoing liability for the entire amount of the indebtedness.

The present case illustrates good grounds for the Singleton court’s concern with avoiding both unjust enrichment of borrowers and inequitable infringement on lenders’ remedies. Judgments such as that under review run afoul of Singleton because they release defaulting borrowers from their entire indebtedness and preclude mortgagees from collecting the total debt evidenced by the notes securing the mortgages they hold, even though the sum of the installment payments not made during the limitations period represents only a fraction of the total debt. See GMAC Mortg., LLC v. Whiddon, 164 So. 3d 97, 100 (Fla. 1st DCA 2015) (dismissal of earlier foreclosure action “did not absolve the Whiddons of their responsibility to make mortgage payments for the remaining twenty-five years of their mortgage agreement”). We further observe that both the note and the mortgage at issue here contain typical provisions reflecting the parties’ agreement that the mortgagee’s forbearance or inaction do not constitute waivers or release appellees from their obligation to pay the note in full. These binding contractual terms refute appellees’ arguments and are inconsistent with the judgment under review.

We have held previously that not even a dismissal with prejudice of a foreclosure action precludes a mortgagee “from instituting a new foreclosure action based on a different act or a new date of default not alleged in the dismissed action.” PNC Bank, N.A. v. Neal, 147 So. 3d 32, 32 (Fla. 1st DCA 2013); see also U.S. Bank Nat. Ass’n v. Bartram, 140 So. 3d 1007, 1014 (Fla. 5th DCA), review granted, 160 So. 3d 892 (Fla. 2014) (Case No. SC14-1305) (dismissal of earlier foreclosure action, whether with or without prejudice, did not bar subsequent foreclosure action based on a new default);Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954, 955 (Fla. 4th DCA 2014)(foreclosure and acceleration based on an earlier default “does not bar subsequent actions and acceleration based upon different events of default”). The dismissal in this case was without prejudice, so much the more preserving appellant’s right to file a new foreclosure action based on appellees’ breaches subsequent to the February 2007 breach asserted as the procedural trigger of the earlier foreclosure action. We find that appellant’s assertion of the right to accelerate was not irrevocably “exercised” within the meaning of cases defining accrual for foreclosure actions, when the right was merely asserted and then dismissed without prejudice. See Olympia Mortg. Corp. v. Pugh, 774 So. 2d 863, 866-67 (Fla. 4th DCA 2000) (“By voluntarily dismissing the suit, [the mortgagee] in effect decided not to accelerate payment on the note and mortgage at that time.”); see also Slottow v. Hull Inv. Co., 129 So. 577, 582 (Fla. 1930) (a mortgagee could waive an acceleration election in certain circumstances). After the dismissal without prejudice, the parties returned to the status quo that existed prior to the filing of the dismissed complaint. As a matter of law, appellant’s 2012 foreclosure action, based on breaches that occurred after the breach that triggered the first complaint, was not barred by the statute of limitations. Evergrene, 143 So. 3d at 955 (“[T]he statute of limitations has not run on all of the payments due pursuant to the note, and the mortgage is still enforceable based upon subsequent acts of default.”).

We are aware that the Third District has reached a contrary conclusion in Deutsche Bank Trust Co. Americas v. Beauvais, 40 Fla. L. Weekly D1, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014) (Case No. 3D14-575). A federal district court has refused to follow Beauvais, noting that it is “contrary to the overwhelming weight of authority.” Stern v. Bank of America Corp., 2015 WL 3991058 at *2-3 (M.D. Fla. June 30, 2015) (No. 2:15-cv-153-FtM-29CM). The court in Beauvais acknowledges that its conclusion is contrary to the weight of authority on the questions presented. 2014 WL 7156961, at *8-9. That court’s docket shows that the court has set the case for rehearing en banc; it remains to be seen whether the merits disposition will change.

Accordingly, we reverse and remand for further proceedings on appellant’s foreclosure action.

THOMAS and MARSTILLER, JJ., CONCUR.

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.

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IF the servicer’s home preservation company steals your stuff…

This US 8th Circuit Appellate opinion should give you heart, IF you can get a damages award from an arbitrator or trial court for theft of your stuff by a home preservation company’s felonious employees.

In this case, the arbitrator awarded the Starks $6 million to punish the servicer, note holder, and home preservation company for breaking into the home during a foreclosure dispute after the Starks had moved into an apartment across the street (still in possession, did not abandon).  The 8th Circuit upheld the award.  Appellants appealed to the SCOTUS which denied certiorari.

https://law.resource.org/pub/us/case/reporter/F3/381/381.F3d.793.03-2366.html

381 F.3d 793

Stanley William STARK; Patricia Garnet Stark, Plaintiffs-Appellants,
v.
SANDBERG, PHOENIX & VON GONTARD, P.C.; Scott Greenberg; EMC Mortgage Corporation; SpvG Trustee, Defendants-Appellees.

No. 03-2366.

United States Court of Appeals, Eighth Circuit.

Submitted: January 15, 2004.

Filed: August 26, 2004.

Appeal from the United States District Court for the Western District of Missouri, Ortrie D. Smith, J. COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Roy B. True, argued, Kansas City, Missouri, for appellant.

Mark G. Arnold, argued, St. Louis, Missouri (Robert B. Best, Jr. and Leonard L. Wagner on the brief), for appellant.

Before BYE, HEANEY and SMITH, Circuit Judges.

BYE, Circuit Judge.

1

Stanley and Patricia Stark appeal the district court’s order vacating in part an arbitration award granting them punitive damages. We reverse.

2

* Stanley and Patricia are husband and wife and live near Kansas City, Missouri. In 1999, in hopes of shoring up a failing business, the Starks borrowed $56,900 against their home and secured the loan with a mortgage. Despite the infusion of funds, the business failed and in April 2000 the Starks petitioned for bankruptcy protection. At about the same time, the Starks’ lender sold the note, which was in default, to EMC Mortgage Corporation making EMC a debt collector under the provisions of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692o. In anticipation of foreclosure, the Starks vacated the home and moved into an apartment across the street. The Starks, however, remained in possession of legal title and did not abandon the home. In June 2000, EMC’s motion to lift the automatic stay was granted and it proceeded with foreclosure.

3

The Starks were represented throughout the foreclosure and bankruptcy proceedings by attorney Roy True who notified EMC’s attorney, Scott Greenberg of Sandberg, Phoenix & von Gontard, P.C., that his representation of the Starks extended beyond the bankruptcy proceedings. Between October 2000 and March 2001, despite letters from True advising EMC he represented the Starks and not to contact them directly, EMC tried several times to deal directly with the Starks. In April 2001, the Starks filed suit against EMC and its attorneys alleging violations of the FDCPA.

4

EMC moved to compel arbitration as required by the parties’ loan agreement, and the district court ordered the dispute submitted to arbitration. The order compelling arbitration is not at issue in this appeal. During the pendency of the arbitration, EMC’s agent, without the Starks’ consent, forcibly entered the home and posted a sign in the front window indicating the “Property has been secured and winterized. Not for sale or rent. In case of emergency call 1st American (732) 363-3626.” The agent then contacted Mrs. Stark at her apartment, and EMC contacted Mr. Stark at work regarding the matter. Further, on November 5, 2001 and January 27, 2002, EMC wrote to the Starks directly regarding insurance coverage on the home. In total, the Starks testified EMC contacted them by mail, telephone or in person at least ten times after being advised they were represented by counsel.

5

After these incidents, the Starks moved to amend their complaint to include claims alleging intentional torts against EMC and seeking punitive damages. EMC opposed the motion arguing the arbitration agreement expressly precluded an award of punitive damages. The Starks contended the limitation on punitive damages was unconscionable and unenforceable. After extensive briefing, the arbitrator concluded the limitation was ambiguous and construed the language against EMC. The arbitrator noted the agreement purported to grant him “all powers provided by law” and then purported to deny the power to award “punitive … damages … as to which borrower and lender expressly waive any right to claim to the fullest extent permitted by law.” The arbitrator concluded,

6

In at least three places the Stark’s [sic] are promised that they can seek all damages allowed by law, and then that promise is taken away. This is the keystone of an ambiguous contract, and the Agreement is to be interpreted in their favor. As a matter of law they are not prohibited from seeking punitive damages from EMC.

7

Appellee’s app. at 22.

8

The arbitrator found EMC violated the FDCPA and awarded the Starks $1000 each in statutory damages, $1000 each in actual damages, $22,780 in attorneys fees, and $9300 for the cost of the arbitration. The arbitrator found EMC’s forcible entry into the premises “reprehensible and outrageous and in total disregard of plaintiff’s [sic] legal rights” and awarded $6,000,000 in punitive damages against EMC. Id. app. at 17.1

9

The Starks moved to confirm the award, and EMC moved to vacate the punitive damages award arguing the arbitration agreement expressly prohibited punitive damages. No other aspect of the award was challenged. The district court vacated the award of punitive damages, holding the agreement was unambiguous and not susceptible to the arbitrator’s interpretation.

10

On appeal, the Starks contend the arbitrator acted within his authority in construing the contract and his finding of an ambiguity was not irrational. EMC argues the district court’s order vacating the award of punitive damages should be affirmed.

II

11

When reviewing a district court’s order confirming or vacating an arbitral award, the court’s findings of fact are reviewed for clear error and questions of law are reviewed de novo. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947-48, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995); Titan Wheel Corp. of Iowa v. Local 2048, Int’l Ass’n of Machinists & Aerospace Workers, 253 F.3d 1118, 1119 (8th Cir. 2001).

12

When reviewing an arbitral award, courts accord “an extraordinary level of deference” to the underlying award itself, Keebler Co. v. Milk Drivers & Dairy Employees Union, Local No. 471, 80 F.3d 284, 287 (8th Cir.1996), because federal courts are not authorized to reconsider the merits of an arbitral award “even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract.” Bureau of Engraving, Inc. v. Graphic Communication Int’l Union, Local 1B, 284 F.3d 821, 824 (8th Cir.2002) (quotingUnited Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987)). Indeed, an award must be confirmed even if a court is convinced the arbitrator committed a serious error, so “long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority.” Bureau of Engraving, 284 F.3d at 824 (quoting Misco, 484 U.S. at 38).

13

The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, established “a liberal federal policy favoring arbitration agreements.” Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Thus, the FAA only allows a district court to vacate an arbitration award

14

(1) Where the award was procured by corruption, fraud, or undue means.

15

(2) Where there was evident partiality or corruption in the arbitrators, or either of them.

16

(3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.

17

(4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

18

9 U.S.C. § 10(a).

19

Similarly, under 9 U.S.C. § 11 a reviewing court may only modify the arbitrator’s award

20

(a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.

21

(b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.

22

(c) Where the award is imperfect in matter of form not affecting the merits of the controversy.

23

9 U.S.C. § 11.

24

A “district court must take the award as it finds it and either vacate the entire award using section 10 or modify the award using section 11.” Legion Ins. Co. v. VCW, Inc., 198 F.3d 718, 721 (8th Cir.1999). The deference owed to arbitration awards, however, “is not the equivalent of a grant of limitless power,” Leed Architectural Prods., Inc. v. United Steelworkers of Am., Local 6674, 916 F.2d 63, 65 (2d Cir.1990), and “courts are neither entitled nor encouraged simply to `rubber stamp’ the interpretations and decisions of arbitrators.”Matteson v. Ryder Sys. Inc., 99 F.3d 108, 113 (3d Cir.1996). Thus, courts may also vacate arbitral awards which are “completely irrational” or “evidence[] a manifest disregard for the law.” Hoffman v. Cargill Inc., 236 F.3d 458, 461 (8th Cir.2001) (internal quotations and citations omitted).

25

An award is “irrational where it fails to draw its essence from the agreement” or it “manifests disregard for the law where the arbitrators clearly identify the applicable, governing law and then proceed to ignore it.” Id. at 461-62. “An arbitrator’s award draws its essence from the [parties’ agreement] as long as it is derived from the agreement, viewed in light of its language, its context, and any other indicia of the parties’ intention.” Johnson Controls, Inc., Sys. & Servs. Div. v. United Ass’n of Journeymen, 39 F.3d 821, 825 (7th Cir.1994) (internal quotations omitted).

26

Faced with these limitations on a court’s ability to review arbitration awards, EMC argues the arbitrator’s award of punitive damages was properly vacated under § 10 because the arbitrator exceeded his powers by modifying the unambiguous agreement, and properly modified under § 11 because in considering the issue of punitive damages the arbitrator made a decision on a matter not submitted to him.2 EMC also argues the arbitrator’s finding of an ambiguity was irrational and without foundation in reason or fact because the clear language of the agreement precludes an award of punitive damages. Finally, EMC argues the award of punitive damages was excessive and made in manifest disregard of the law. Because we conclude the arbitration agreement unambiguously permitted the award of punitive damages, we hold the award of punitive damages was proper and reverse the district court.

III

27

The plain language of the arbitration agreement states the “borrower and lender expressly waive any right to claim [punitive damages] to the fullest extent permitted by law.” Appellee’s app. at 19 (emphasis added). Thus, the agreement only effected a limited waiver of punitive damages, that is, punitive damages were waived only if the governing law permitted such a waiver. Conversely, if the law did not permit the waiver of punitive damages, the arbitration agreement unambiguously preserved the right to claim them.

28

Under Missouri law “there is no question that one may never exonerate oneself from future liability for intentional torts or for gross negligence, or for activities involving the public interest.” Alack v. Vic Tanny Int’l of Mo., Inc., 923 S.W.2d 330, 337 (Mo.1996) (citingLiberty Fin. Mgmt. Corp. v. Beneficial Data Processing Corp., 670 S.W.2d 40, 48 (Mo.App.1984)) (in turn citing 6A Corbin on Contracts, § 1472 (1962)). An attempt to procure a waiver of punitive damages is an attempt to exonerate oneself from future liability for intentional torts or gross negligence, because the remedy of punitive damages would otherwise be available for such acts. Thus, Missouri law did not permit EMC to exonerate itself from liability for the intentional torts committed against the Starks by procuring the punitive damages waiver, and the arbitrator did not exceed his authority in awarding punitive damages.

29

We recognize the FAA allows parties to incorporate terms into arbitration agreements that are contrary to state law. See UHC Mgmt. Co. v. Computer Sciences, Corp., 148 F.3d 992, 997 (8th Cir.1998) (holding “[p]arties may choose to be governed by whatever rules they wish regarding how an arbitration itself will be conducted.”) (citation omitted). Thus, had the parties to this agreement intended its interpretation to be governed solely by the FAA, the punitive damages waiver might have barred any such award. The plain language of the agreement, however, makes it clear Missouri law applies to this issue.

30

The agreement’s arbitration clause provides,

31

Arbitration. To the extent allowed by applicable law, any Claim … shall be resolved by binding arbitration in accordance with (1) the Federal Arbitration Act, . . . (2) the Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association … and (3) this Agreement.

32

Appellee’s app. at 19 (emphasis added).

33

The agreement then defines applicable law as “the laws of the state in which the property which secures the Transaction is located.” Id.(emphasis added). In other words, the agreement makes clear the parties intent to apply Missouri state substantive law while operating within the framework of the FAA, American Arbitration Association rules and the agreement. As previously noted, the punitive damages waiver expressly states the parties intended to waive punitive damages only to the extent permitted by Missouri law. Because Missouri law would not permit a waiver under the facts of this case, we hold the arbitrator’s award of punitive damages was proper.

IV

34

Alternatively, while we believe the plain meaning of the agreement supports the award of punitive damages, we also conclude the arbitrator’s finding of an ambiguity was not irrational.

35

The arbitration clause states any claims will be resolved in accordance with the FAA, which permits a waiver of punitive damages. The choice of laws provision, however, states claims must be resolved in accordance with “applicable [Missouri] law,” which does not permit the waiver of punitive damages argued for by EMC in this case. Thus, an arbitrator could reasonably conclude this agreement is ambiguous.

36

In Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995), the Supreme Court considered the juxtaposition of a choice of laws provision prohibiting punitive damages with an arbitration clause permitting an award of punitive damages. The Court concluded “[a]t most, the choice-of-law clause introduces an ambiguity into an arbitration agreement that would otherwise allow punitive damages awards.” Id. (Emphasis added). As in Mastrobuono, an arbitrator interpreting this agreement could reasonably conclude the apparent conflict between the arbitration clause and the choice of laws provision introduced an ambiguity into the agreement. Accordingly, the Supreme Court’s recognition that an ambiguity is created when an agreement purports to be governed by conflicting state and federal law is instructive, and supports the arbitrator’s finding of an ambiguity.

37

Additionally, we cannot ignore well-settled precedent from this court holding state contract law governs whether an arbitration agreement is ambiguous. See Lyster v. Ryan’s Family Steak Houses, Inc., 239 F.3d 943, 946 (8th Cir.2001). Under Missouri law, “[t]he primary rule in the interpretation of a contract is to ascertain the intention of the parties and to give effect to that intention.” Speedie Food Mart, Inc. v. Taylor, 809 S.W.2d 126, 129 (Mo.Ct.App.1991). The test for determining if an ambiguity exists in a written contract is “whether the disputed language, in the context of the entire agreement, is reasonably susceptible of more than one construction giving the words their plain meaning as understood by a reasonable average person.” Speedie Food Mart, 809 S.W.2d at 129.

38

In this case, EMC argues the exclusionary language is clear and unambiguous and shields it from liability for any award of punitive damages. When viewed in the context of Missouri law governing exculpatory clauses, however, this clause could easily be viewed as ambiguous. “A `latent ambiguity’ arises where a writing on its face appears clear and unambiguous, but some collateral matter makes the meaning uncertain.” Royal Banks of Missouri v. Fridkin, 819 S.W.2d 359, 362 (Mo. 1991) (en banc) (citation omitted). Here, the ambiguity arises because the clause attempts to effect a prospective waiver of rights which Missouri law holds may not be waived. Under Missouri law “there is no question that one may never exonerate oneself from future liability for intentional torts or for gross negligence, or for activities involving the public interest.” Alack, 923 S.W.2d at 337 (citations omitted). Words purporting to waive claims which cannot be waived “demonstrate the ambiguity of the contractual language.” Id.

39

Finally, EMC “cannot overcome the common-law rule of contract interpretation that a court should construe ambiguous language against the interest of the party that drafted it.” Mastrobuono, 514 U.S. at 62, 115 S.Ct. 1212 (citations omitted). EMC “cannot now claim the benefit of the doubt. The reason for this rule is to protect the party who did not choose the language from an unintended or unfair result.” Id. at 63, 115 S.Ct. 1212.

40

Accordingly, we conclude the arbitrator’s finding that the contract was ambiguous was not irrational.

V

41

EMC next argues the award of punitive damages was properly vacated because it is excessive and exhibits a manifest disregard of the law. We disagree.

42

“Beyond the grounds for vacation provided in the FAA, an award will only be set aside where it is completely irrational or evidences a manifest disregard for the law.” Hoffman, 236 F.3d at 461 (internal citations and quotations omitted) (emphasis added). “These extra-statutory standards are extremely narrow: … [A]n arbitration decision only manifests disregard for the law where the arbitrators clearly identify the applicable, governing law and then proceed to ignore it.” Id. at 461-62 (citing Stroh Container Co. v. Delphi Indus., 783 F.2d 743, 749-50 (8th Cir.1986)) (emphasis added).

43

“A party seeking vacatur [based on manifest disregard of the law] bears the burden of proving that the arbitrators were fully aware of the existence of a clearly defined governing legal principle, but refused to apply it, in effect, ignoring it.” Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 389 (2d Cir.2003). Because “[a]rbitrators are not required to elaborate their reasoning supporting an award,” El Dorado Sch. Dist. # 15 v. Continental Cas. Co., 247 F.3d 843, 847 (8th Cir.2001) (internal quotations omitted), “[i]f they choose not to do so, it is all but impossible to determine whether they acted with manifest disregard for the law.” W. Dawahare v. Spencer,210 F.3d 666, 669 (6th Cir.2000) (citing Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir. 1995)).

44

Manifest disregard of the law “is more than a simple error in law or a failure by the arbitrators to understand or apply it; and, it is more than an erroneous interpretation of the law.” Duferco Int’l, 333 F.3d at 389 (citations omitted). “Our disagreement with an arbitrator’s interpretation of the law or determination of the facts is an insufficient basis for setting aside his award.” El Dorado Sch. Dist., 247 F.3d at 847 (citing Hoffman, 236 F.3d at 462).

45

In support of its claim, EMC argues the arbitrator disregarded the Supreme Court’s pronouncements in BMW of N. Am., Inc. v. Gore,517 U.S. 559, 572-74, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (describing a 500:1 ratio of punitive to compensatory damages as “breathtaking” and suspicious), and State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 426, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (finding a 145:1 ratio of punitive to compensatory damages presumptively excessive). In so arguing, however, EMC has failed to present any evidence that the arbitrator “clearly identif[ied] the applicable, governing law and then proceed[ed] to ignore it.” Hoffman,236 F.3d at 461-62 (citing Stroh Container, 783 F.2d at 749-50). None of the cases relied upon by EMC are cited in the arbitrator’s decision,3 and there is nothing in the record to demonstrate “one of the parties clearly stated the law and the arbitrator[ ] expressly chose not to follow it.” W. Dawahare, 210 F.3d at 670; see also Duferco Int’l, 333 F.3d at 390 (“In determining an arbitrator’s awareness of the law, we impute only knowledge of governing law identified by the parties to the arbitration.”) (citation omitted).

46

Indeed, to the extent the arbitrator’s decision sets forth the basis for the punitive damages award, it is apparent the arbitrator did not disregard governing law. The arbitrator’s award was intended to punish EMC and to deter others from similar conduct. In arriving at the appropriate amount, the arbitrator specifically found the $6,000,000 award (amounting to one-tenth of one percent of shareholder equity) was “not great punishment but it should act as a deterence [sic].” Appellee’s app. at 18; see also Barnett v. La Societe Anonyme Turbomeca France, 963 S.W.2d 639, 655 (Mo.App.1998) (holding under Missouri law the net worth of a defendant is relevant when determining the extent of punitive damages necessary to punish and deter the defendant). Accordingly, we reject EMC’s claim of manifest disregard.

47

“Although this result may seem draconian, the rules of law limiting judicial review and the judicial process in the arbitration context are well established and the parties … can be presumed to have been well versed in the consequences of their decision to resolve their disputes in this manner.” Stroh Container, 783 F.2d at 751. Moreover, “[a]rbitration is not a perfect system of justice, nor it is [sic] designed to be.”Hoffman, 236 F.3d at 462 (citation omitted). Rather, it “is designed primarily to avoid the complex, time-consuming and costly alternative of litigation.” Id.

48

In the arbitration setting we have almost none of the protections that fundamental fairness and due process require for the imposition of this form of punishment. Discovery is abbreviated if available at all. The rules of evidence are employed, if at all, in a very relaxed manner. The factfinders (here the panel) operate with almost none of the controls and safeguards [present in traditional litigation.]

49

Lee v. Chica, 983 F.2d 883, 889 (8th Cir. 1993) (Beam, J. concurring in part and dissenting in part).

50

Here, EMC chose to resolve this “dispute quickly and efficiently through arbitration.” Schoch v. InfoUSA, Inc., 341 F.3d 785, 791 (8th Cir.2003), cert. denied, ___ U.S. ___, 124 S.Ct. 1414, 158 L.Ed.2d 81 (2004). Indeed, it was EMC that insisted on removing the matter to arbitration. In so doing, EMC “got exactly what it bargained for.” Id. “Having entered such a contract, [EMC] must subsequently abide by the rules to which it agreed.” Hoffman, 236 F.3d at 463 (citation omitted).

VI

51

We reverse the district court’s order vacating the award of punitive damages and remand with instructions to confirm the arbitrator’s award in its entirety.

Notes:

1The arbitrator indicated the award of punitive damages was calculated as one percent of EMC’s shareholder equity. One percent of equity, however, would have resulted in an award of $60,000,000. The arbitrator later clarified this mistake indicating it was his intent to award $6,000,000. Thus, the award was actually calculated as one-tenth of one percent of shareholder equity

2EMC’s § 11 argument is clearly without merit. The issue of punitive damages was submitted to the arbitrator. If the award was improper because it exceeded the scope of the agreement, § 10 is the proper avenue to redress the arbitrator’s error

3The arbitrator’s decision predatesState Farm making it impossible for the arbitrator to have identified the decision as controlling.

Garfield Fruit Loopy Over Tila Rescission

I believe Neil Garfield misleads borrowers with his diatribe in the article Rescission Confusion Persists. He must have become desperate to sell his useless rescission packages.  He keeps hammering his readers to file a notice of rescission, no matter what, implying that they have a ghost of a chance of success.  He ignores reality, like all kool-aid-drinkers do.  Here’s the reality.

Many court opinions, revealed on previous TILA rescission threads attest to how rescission works. That has not changed at all. TILA and Regulation Z require an unwinding of the transaction with tender first by the lender then by the borrower, and that typically happens when the borrower files an answer to the foreclosure complaint or when the borrower sues to enforce the rescission. The court will determine the following:

1. Did a TILA violation warranting rescission actually occur?
2. Did the borrower send notice of rescission to the creditor within 3 years after loan consummation?
3. Did the creditor receive that notice?
4. Can the creditor tender?
5. Can the borrower tender or will the lender accept an alternative?

A NO answer to any of the above can justify defeat of the rescission, and the court will not order it.

The borrower has one year after expiry of the 20 days following sending of notice of rescission to the creditor in which to sue the creditor for failing to respond within 20 days.

Jesinoski opinion changed nothing in the US Circuits that allowed suit after 3 years. It merely requires all courts to allow the borrower to sue for rescission later than 3 years after consummation of the loan, provided 1, 2, and 3 above occurred.

The creditor has no legal duty to sue the borrower to force a TILA rescission.

Garfield doesn’t want to tell readers the hard core truth that very few people qualify for a TILA rescission because most who sent the notice stopped paying and face foreclosure, and they cannot tender.  Therefore, the court will not order the rescission and they will lose the house.  They would be totally stupid to pay Garfield for a rescission package.

To understand the proper way to beat the bank, visit the Mortgage Attack web site.

Read my discussion of TILA rescission and related case law at Scalia, Jesinoski, and the Process of TILA Rescission/

Bob Hurt

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Bob Hurt, Writer

Why a Mortgage Note is Not a Security

You might believe that a mortgage note or a deed of trust is a security,  but here is your proof to the contrary:
 
The 1934 Act says that the term “security” includes “any note . . . [excepting one] which has a maturity at the time of issuance of not exceeding nine months,” and the 1933 Act says that the term means “any note” save for the registration exemption in § 3(a)(3). These are the plain terms of both acts, to be applied “unless the context otherwise requires.” A party asserting that a note of more than nine months maturity is not within the 1934 Act (or that a note with a maturity of nine months or less is within it) or that any note is not within the antifraud provisions of the 1933 Act[18] has the 1138*1138 burden of showing that “the context otherwise requires.” (Emphasis supplied.) One can readily think of many cases where it does—the note delivered in consumer financing, the note secured by a mortgage on a home, the short-term note secured by a lien on a small business or some of its assets, the note evidencing a “character” loan to a bank customer, short-term notes secured by an assignment of accounts receivable, or a note which simply formalizes an open-account debt incurred in the ordinary course of business (particularly if, as in the case of the customer of a broker, it is collateralized). When a note does not bear a strong family resemblance to these examples and has a maturity exceeding nine months, § 10(b) of the 1934 Act should generally be held to apply.[19]
“See Exchange Nat. Bank, supra, at 1138 (types of notes that are not “securities” include “the note delivered in consumer financing, the note secured by a mortgage on a home, the short-term note secured by a lien on a small business or some of its assets, the note evidencing a `character’ loan to a bank customer, short-term notes secured by an assignment of accounts receivable, or a note which simply formalizes an open-account debt incurred in the ordinary course of business (particularly if, as in the case of the customer of a broker, it is collateralized)”);Chemical Bank, supra, at 939 (adding to list “notes evidencing loans by commercial banks for current operations”).”
For an explanation, read this first part of the Reves opinion.  The law does not always mean what it says.
494 U.S. 56 (1990)

REVES ET AL.
v.
ERNST & YOUNG

No. 88-1480.Supreme Court of United States.

Argued November 27, 1989Decided February 21, 1990CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT58*58 John R. McCambridge argued the cause for petitioners. With him on the briefs wereGary M. Elden, Jay R. Hoffman, and Robert R. Cloar.

Michael R. Lazerwitz argued the cause for the Securities and Exchange Commission asamicus curiae urging reversal. With him on the brief were Solicitor General Starr, Deputy Solicitor General Merrill, Daniel L. Goelzer, Paul Gonson, Jacob H. Stillman, Martha H. McNeely, Randall W. Quinn, and Eva Marie Carney.

John Matson argued the cause for respondent. With him on the brief were Carl D. Liggio, Kathryn A. Oberly, and Fred Lovitch.[*]

JUSTICE MARSHALL delivered the opinion of the Court.

This case presents the question whether certain demand notes issued by the Farmers Cooperative of Arkansas and Oklahoma (Co-Op) are “securities” within the meaning of § 3(a)(10) of the Securities Exchange Act of 1934. We conclude that they are.

I

The Co-Op is an agricultural cooperative that, at the time relevant here, had approximately 23,000 members. In order to raise money to support its general business operations, the Co-Op sold promissory notes payable on demand by the holder. Although the notes were uncollateralized and uninsured, they paid a variable rate of interest that was adjusted 59*59 monthly to keep it higher than the rate paid by local financial institutions. The Co-Op offered the notes to both members and nonmembers, marketing the scheme as an “Investment Program.” Advertisements for the notes, which appeared in each Co-Op newsletter, read in part: “YOUR CO-OP has more than $11,000,000 in assets to stand behind your investments. The Investment is not Federal[sic] insured but it is. . . Safe . . . Secure . . . and available when you need it.” App. 5 (ellipses in original). Despite these assurances, the Co-Op filed for bankruptcy in 1984. At the time of the filing, over 1,600 people held notes worth a total of $10 million.

After the Co-Op filed for bankruptcy, petitioners, a class of holders of the notes, filed suit against Arthur Young & Co., the firm that had audited the Co-Op’s financial statements (and the predecessor to respondent Ernst & Young). Petitioners alleged, inter alia, that Arthur Young had intentionally failed to follow generally accepted accounting principles in its audit, specifically with respect to the valuation of one of the Co-Op’s major assets, a gasohol plant. Petitioners claimed that Arthur Young violated these principles in an effort to inflate the assets and net worth of the Co-Op. Petitioners maintained that, had Arthur Young properly treated the plant in its audits, they would not have purchased demand notes because the Co-Op’s insolvency would have been apparent. On the basis of these allegations, petitioners claimed that Arthur Young had violated the antifraud provisions of the 1934 Act as well as Arkansas’ securities laws.

Petitioners prevailed at trial on both their federal and state claims, receiving a $6.1 million judgment. Arthur Young appealed, claiming that the demand notes were not “securities” under either the 1934 Act or Arkansas law, and that the statutes’ antifraud provisions therefore did not apply. A panel of the Eighth Circuit, agreeing with Arthur Young on both the state and federal issues, reversed. Arthur Young & Co. v. Reves, 856 F. 2d 52 (1988). We granted certiorari to address 60*60 the federal issue, 490 U. S. 1105 (1989), and now reverse the judgment of the Court of Appeals.

II

A

This case requires us to decide whether the note issued by the Co-Op is a “security” within the meaning of the 1934 Act. Section 3(a)(10) of that Act is our starting point:

“The term `security’ means any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any instrument commonly known as a `security’; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is like-wise limited.” 48 Stat. 884, as amended, 15 U. S. C. § 78c(a)(10).

The fundamental purpose undergirding the Securities Acts is “to eliminate serious abuses in a largely unregulated securities market.” United Housing Foundation, Inc. v.Forman, 421 U. S. 837, 849 (1975). In defining the scope of the market that it wished to regulate, Congress painted with a broad brush. It recognized the virtually limitless scope of 61*61 human ingenuity, especially in the creation of “countless and variable schemes devised by those who seek the use of the money of others on the promise of profits,”SEC v. W. J. Howey Co., 328 U. S. 293, 299 (1946), and determined that the best way to achieve its goal of protecting investors was “to define `the term “security” in sufficiently broad and general terms so as to include within that definition the many types of instruments that in our commercial world fall within the ordinary concept of a security.’ ” Forman, supra, at 847-848 (quoting H. R. Rep. No. 85, 73d Cong., 1st Sess., 11 (1933)). Congress therefore did not attempt precisely to cabin the scope of the Securities Acts.[1] Rather, it enacted a definition of “security” sufficiently broad to encompass virtually any instrument that might be sold as an investment.

Congress did not, however, “intend to provide a broad federal remedy for all fraud.”Marine Bank v. Weaver, 455 U. S. 551, 556 (1982). Accordingly, “[t]he task has fallen to the Securities and Exchange Commission (SEC), the body charged with administering the Securities Acts, and ultimately to the federal courts to decide which of the myriad financial transactions in our society come within the coverage of these statutes.”Forman, supra, at 848. In discharging our duty, we are not bound by legal formalisms, but instead take account of the economics of the transaction under investigation. See, e. g., Tcherepnin v. Knight, 389 U. S. 332, 336 (1967) (in interpreting the term “security,” “form should be disregarded for substance and the emphasis should be on economic reality”). Congress’ purpose in enacting the securities laws was to regulate investments,in whatever form they are made and by whatever name they are called.

62*62 A commitment to an examination of the economic realities of a transaction does not necessarily entail a case-by-case analysis of every instrument, however. Some instruments are obviously within the class Congress intended to regulate because they are by their nature investments. In Landreth Timber Co. v. Landreth, 471 U. S. 681 (1985), we held that an instrument bearing the name “stock” that, among other things, is negotiable, offers the possibility of capital appreciation, and carries the right to dividends contingent on the profits of a business enterprise is plainly within the class of instruments Congress intended the securities laws to cover. Landreth Timber does not signify a lack of concern with economic reality; rather, it signals a recognition that stock is, as a practical matter, always an investment if it has the economic characteristics traditionally associated with stock. Even if sparse exceptions to this generalization can be found, the public perception of common stock as the paradigm of a security suggests that stock, in whatever context it is sold, should be treated as within the ambit of the Acts. Id., at 687, 693.

We made clear in Landreth Timber that stock was a special case, explicitly limiting our holding to that sort of instrument. Id., at 694. Although we refused finally to rule out a similar per se rule for notes, we intimated that such a rule would be unjustified. Unlike “stock,” we said, ” `note’ may now be viewed as a relatively broad term that encompasses instruments with widely varying characteristics, depending on whether issued in a consumer context, as commercial paper, or in some other investment context.” Ibid. (citing Securities Industry Assn. v. Board of Governors of Federal Reserve System, 468 U. S. 137, 149-153 (1984)). While common stock is the quintessence of a security, Landreth Timber, supra, at 693, and investors therefore justifiably assume that a sale of stock is covered by the Securities Acts, the same simply cannot be said of notes, which are used in a variety of settings, not all of which involve investments. Thus,63*63 the phrase “any note” should not be interpreted to mean literally “any note,” but must be understood against the backdrop of what Congress was attempting to accomplish in enacting the Securities Acts.[2]

Because the Landreth Timber formula cannot sensibly be applied to notes, some other principle must be developed to define the term “note.” A majority of the Courts of Appeals that have considered the issue have adopted, in varying forms, “investment versus commercial” approaches that distinguish, on the basis of all of the circumstances surrounding the transactions, notes issued in an investment context (which are “securities”) from notes issued in a commercial or consumer context (which are not). See, e. g., Futura Development Corp. v. Centex Corp., 761 F. 2d 33, 40-41 (CA1 1985);McClure v. First Nat. Bank of Lubbock, Texas, 497 F. 2d 490, 492-494 (CA5 1974);Hunssinger v. Rockford Business Credits, Inc., 745 F. 2d 484, 488 (CA7 1984);Holloway v. Peat, Marwick, Mitchell & Co., 879 F. 2d 772, 778-779 (CA10 1989), cert. pending No. 89-532.

The Second Circuit’s “family resemblance” approach begins with a presumption that anynote with a term of more than nine months is a “security.” See, e. g., Exchange Nat. Bank of Chicago v. Touche Ross & Co., 544 F. 2d 1126, 1137 (CA2 1976). Recognizing that not all notes are securities, however, the Second Circuit has also devised a list of notes that it has decided are obviously not securities. Accordingly, 64*64 the “family resemblance” test permits an issuer to rebut the presumption that a note is a security if it can show that the note in question “bear[s] a strong family resemblance” to an item on the judicially crafted list of exceptions, id., at 1137-1138, or convinces the court to add a new instrument to the list, see, e. g., Chemical Bank v. Arthur Anderson & Co., 726 F. 2d 930, 939 (CA2 1984).

In contrast, the Eighth and District of Columbia Circuits apply the test we created in SECv. W. J. Howey Co., 328 U. S. 293 (1946), to determine whether an instrument is an “investment contract” to the determination whether an instrument is a “note.” Under this test, a note is a security only if it evidences “(1) an investment; (2) in a common enterprise; (3) with a reasonable expection of profits; (4) to be derived from the entrepreneurial or managerial efforts of others.” 856 F. 2d, at 54 (case below). Accord,Baurer v. Planning Group, Inc., 215 U. S. App. D. C. 384, 391-393, 669 F. 2d 770, 777-779 (1981). See also Underhill v. Royal, 769 F. 2d 1426, 1431 (CA9 1985) (setting forth what it terms a “risk capital” approach that is virtually identical to the Howey test).

We reject the approaches of those courts that have applied the Howey test to notes;Howey provides a mechanism for determining whether an instrument is an “investment contract.” The demand notes here may well not be “investment contracts,” but that does not mean they are not “notes.” To hold that a “note” is not a “security” unless it meets a test designed for an entirely different variety of instrument “would make the Acts’ enumeration of many types of instruments superfluous,” Landreth Timber, 471 U. S., at 692, and would be inconsistent with Congress’ intent to regulate the entire body of instruments sold as investments, see supra, at 60-62.

The other two contenders — the “family resemblance” and “investment versus commercial” tests — are really two ways of formulating the same general approach. Because we 65*65 think the “family resemblance” test provides a more promising framework for analysis, however, we adopt it. The test begins with the language of the statute; because the Securities Acts define “security” to include “any note,” we begin with a presumption that every note is a security.[3] We nonetheless recognize that this presumption cannot be irrebutable. As we have said, supra, at 61, Congress was concerned with regulating the investment market, not with creating a general federal cause of action for fraud. In an attempt to give more content to that dividing line, the Second Circuit has identified a list of instruments commonly denominated “notes” that nonetheless fall without the “security” category. See Exchange Nat. Bank, supra, at 1138 (types of notes that are not “securities” include “the note delivered in consumer financing, the note secured by a mortgage on a home, the short-term note secured by a lien on a small business or some of its assets, the note evidencing a `character’ loan to a bank customer, short-term notes secured by an assignment of accounts receivable, or a note which simply formalizes an open-account debt incurred in the ordinary course of business (particularly if, as in the case of the customer of a broker, it is collateralized)”);Chemical Bank, supra, at 939 (adding to list “notes evidencing loans by commercial banks for current operations”).

We agree that the items identified by the Second Circuit are not properly viewed as “securities.” More guidance, though, is needed. It is impossible to make any meaningful inquiry into whether an instrument bears a “resemblance” to 66*66 one of the instruments identified by the Second Circuit without specifying what it is about those instruments that makes them non-“securities.” Moreover, as the Second Circuit itself has noted, its list is “not graven in stone,” 726 F. 2d, at 939, and is therefore capable of expansion. Thus, some standards must be developed for determining when an item should be added to the list.

An examination of the list itself makes clear what those standards should be. In creating its list, the Second Circuit was applying the same factors that this Court has held apply in deciding whether a transaction involves a “security.” First, we examine the transaction to assess the motivations that would prompt a reasonable seller and buyer to enter into it. If the seller’s purpose is to raise money for the general use of a business enterprise or to finance substantial investments and the buyer is interested primarily in the profit the note is expected to generate, the instrument is likely to be a “security.” If the note is exchanged to facilitate the purchase and sale of a minor asset or consumer good, to correct for the seller’s cash-flow difficulties, or to advance some other commercial or consumer purpose, on the other hand, the note is less sensibly described as a “security.” See, e. g., Forman, 421 U. S., at 851 (share of “stock” carrying a right to subsidized housing not a security because “the inducement to purchase was solely to acquire subsidized low-cost living space; it was not to invest for profit”). Second, we examine the “plan of distribution” of the instrument, SEC v. C. M. Joiner Leasing Corp.,320 U. S. 344, 353 (1943), to determine whether it is an instrument in which there is “common trading for speculation or investment,” id., at 351. Third, we examine the reasonable expectations of the investing public: The Court will consider instruments to be “securities” on the basis of such public expectations, even where an economic analysis of the circumstances of the particular transaction might suggest that the instruments are not “securities” as used in that transaction. Compare Landreth Timber,471 67*67 U. S., at 687, 693 (relying on public expectations in holding that common stock is always a security), with id., at 697-700 (STEVENS, J., dissenting) (arguing that sale of business to single informed purchaser through stock is not within the purview of the Acts under the economic reality test). See also Forman, supra, at 851. Finally, we examine whether some factor such as the existence of another regulatory scheme significantly reduces the risk of the instrument, thereby rendering application of the Securities Acts unnecessary. See, e. g., Marine Bank, 455 U. S., at 557-559, and n. 7.

We conclude, then, that in determining whether an instrument denominated a “note” is a “security,” courts are to apply the version of the “family resemblance” test that we have articulated here: A note is presumed to be a “security,” and that presumption may be rebutted only by a showing that the note bears a strong resemblance (in terms of the four factors we have identified) to one of the enumerated categories of instrument. If an instrument is not sufficiently similar to an item on the list, the decision whether another category should be added is to be made by examining the same factors.

Bob Hurt, Concerned Bob Hurt         Blog 1 2  f  t  
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HOW TO HAMMER OUT CASH FOR MORTGAGE VICTIMS

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Beat the bank with a bigger hammer

Proof of Methodology

Check out this proof (linked below) of how hugely mortgage victims can win a wad of cash if you will only learn how (and commit) to attack the validity of the loan.  NO OTHER methodology wins compensation for mortgagors.

Hammer v Residential (2015)

Hammer v Residential Credit Solutions – 2015-USDC-ILND-1_13-cv-06397-0

Click the above link to download the pdf containing the trial opinion, amended complaint, and damages award.

An Illinois jury returned a money verdict in favor of Alena Hammer against Residential Credit Solutions, Inc. (RCS), a national mortgage loan servicer headquartered in Fort Worth, Texas, for its breach of contract, violations of the Real Estate Settlement Procedures Act (RESPA), and violations of the unfairness and deception provisions of the Illinois Consumer Fraud and Deceptive Business Practices Act. All of Hammer’s claims dealt with RCS’s misconduct in handling and servicing the mortgage loan on Hammer’s home in DuPage County, Illinois, where Hammer has resided for the last 27 years.

The court awarded Alena Hammer $500,000 in compensatory damages and $1,500,000 in punitive damages.

Revisit Current and Old Cases?

Do you think this additional revelation about the workability of “Mortgage Attack” methodology would justify your revisiting some of your client’s cases and actually doing the work it takes to find the injuries they have suffered at the inception of the loan?

I know a mortgage examiner who can guide you through the process.  Why not call me so we can chat about it?

727 669 5511

Garfield Reaches New Bozo High on Glaski Dope

Is Neil Garfield high on the dope of the deprecated Glaski opinion?  Neil has gone off on another rabbit hunt when he should spend his energy chasing the werewolves. But even if he caught a werewolf, he has no silver bullets, so the werewolf will just laugh at him.

I have denounced his nonsense elsewhere, and on http://livingliesthetruth.com.

In his message about the Legal Impossibility that a REMIC trust does not own the note,  he brags on Dan Edstrom, who does scam securitization audits that never helped anyone save the house from foreclosure or win damages from injurious participants in the loan process. And he brags on the Thomas Adams amicus brief (Glaski_Affidavit-Thomas-Adams_5-15) on behalf of Glaski who lost his house to foreclosure and should have lost it, but got an appellate win by whining that the note went into the trust after the closing date.

BozoAnd Neil knows that courts all over the land have lambasted the Glaski opinion. Recently a New York appeals panel whacked Erobobo’s nonsensical assignment-after-the-closing-date argument:

******** New Erobobo opinion **********

“On July 17, 2006, Rotimi Erobobo executed a note to secure a loan from Alliance Mortgage Banking Corporation (hereinafter Alliance), to purchase real property located in Brooklyn. Erobobo gave a mortgage to Alliance to secure that debt, thus encumbering the subject premises. Wells Fargo Bank, N.A. (hereinafter the plaintiff), as trustee for ABFC 2006-OPT3, ABFC Asset-Backed Certificates, Series 2006-OPT3 (hereinafter the trust), alleges that it was assigned the note and mortgage on July 18, 2008. Erobobo allegedly defaulted on the mortgage in September 2009, and, in December 2009, the plaintiff commenced this action against Erobobo, among others, to foreclose the mortgage. Erobobo’s pro se answer contained a general denial of all allegations, and set forth no affirmative defenses. The plaintiff thereafter moved for summary judgment on the complaint, submitting the mortgage, the unpaid note, and evidence of Erobobo’s default. In opposition, Erobobo, now represented by counsel, contended that the plaintiff lacked standing because the purported July 18, 2008, assignment of the note and mortgage to the plaintiff failed to comply with certain provisions of the pooling and servicing agreement (hereinafter the PSA) that governed acquisitions by the trust, and was thus void under New York law. The plaintiff replied that Erobobo waived his right to assert a defense based on lack of standing by not asserting that defense in his answer or in a pre-answer motion to dismiss the complaint, and that, in any event, Erobobo’s contention was without merit.

“The Supreme Court concluded that Erobobo’s challenge to the plaintiff’s possession, [*2]or its status as an assignee, of the note and mortgage did not implicate the defense of lack of standing, but merely disputed an element of the plaintiff’s prima facie case, i.e., its contention that it possessed or was duly assigned the subject note and mortgage. On the merits, the court concluded that Erobobo raised a triable issue of fact as to whether the purported assignment of the note and mortgage to the plaintiff violated certain provisions of the PSA governing the trust, and was therefore void under EPTL 7-2.4. The plaintiff appeals. We reverse.

“The plaintiff established its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of the defendant’s default (see Deutsche Bank Natl. Trust Co. v Islar, 122 AD3d 566, 567; Solomon v Burden, 104 AD3d 839; Argent Mtge. Co., LLC v Mentesana, 79 AD3d 1079; Wells Fargo Bank, N.A. v Webster, 61 AD3d 856).

“In opposition, Erobobo failed to raise a triable issue of fact. Even affording a liberal reading to Erobobo’s pro se answer (see Boothe v Weiss, 107 AD2d 730; Haines v Kerner, 404 US 519, 520-521), there is no language in the answer from which it could be inferred that he sought to assert the defense of lack of standing. Nor did Erobobo raise this defense in a pre-answer motion to dismiss the complaint. Accordingly, the defendant waived the defense of lack of standing (see CPLR 3211[a][3]; [e]; Matter of Fossella v Dinkins, 66 NY2d 162, 167-168; Bank of N.Y. Mellon Trust Co. v McCall, 116 AD3d 993; Aames Funding Corp. v Houston, 57 AD3d 808; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 244), and could not raise that defense for the first time in opposition to the plaintiff’s motion for summary judgment (see Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d at 240). In any event, Erobobo, as a mortgagor whose loan is owned by a trust, does not have standing to challenge the plaintiff’s possession or status as assignee of the note and mortgage based on purported noncompliance with certain provisions of the PSA (see Bank of N.Y. Mellon v Gales, 116 AD3d 723, 725; Rajamin v Deutsche Bank Natl. Trust Co., 757 F3d 79, 86-87 [2d Cir]).

“Erobobo’s contention that the plaintiff is not a “holder in due course” of the note and mortgage, as that term is employed in the UCC, is raised for the first time on appeal, and is not properly before this Court for appellate review (see Goldman & Assoc., LLP v Golden, 115 AD3d 911, 912-913; Muniz v Mount Sinai Hosp. of Queens, 91 AD3d 612, 618).”

**************

In other words, Erobobo screwed up his case out of incompetence, but it had no merit anyway. And the New York appeals court sent him packing.

The Erobobo opinion cited Rajamin v Deutsche Bank Natl. Trust Co., a case dealing with assignment into the trust after the closing date.

Read the opinion, starting with the Justia summary:

“Plaintiffs appealed the district court’s dismissal of their claims against four trusts to which their loans and mortgages were assigned in transactions involving the mortgagee bank, and against those trusts’ trustee. The district court granted defendants’ motion to dismiss for failure to state a claim, finding that plaintiffs were neither parties to nor third-party beneficiaries of the assignment agreements and therefore lacked standing to pursue the claims. It is undisputed that in 2009 or 2010, each plaintiff was declared to be in default of his mortgage, and foreclosure proceedings were instituted in connection with the institution of said foreclosure proceedings, the trustee claimed to own each of plaintiff’s mortgage and that plaintiffs are not seeking to enjoin foreclosure proceedings. Assuming that these concessions have not rendered plaintiffs’ claims moot, the court affirmed the district court’s ruling that plaintiffs lacked standing to pursue their challenges to defendants’ ownership of the loans and entitlement to payments. Plaintiffs neither established constitutional nor prudential standing to pursue the claims they asserted.”

I can barely restrain myself from calling Neil Garfield an idiot for continuing to harp on this DEAD ISSUE of whether the note assignment into a trust after the closing date has any merit. Myriad courts have denounced the question as meritless. And it makes no sense when the Uniform Commercial Code clearly states that even a person in wrongful possession of a note may enforce it.

“UCC § 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT.
“Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.”

Mortgage Attack LogoApparently, Garfield wants you, the reader, to call him to help you with your mortgage problems, so that he can lure you into wasting your money on a securitization audit or his rescission package or some other useless service that will not save you from losing your home AND will not win you any compensation for injuries.

By my observation, 90% of single family home mortgagors get injured by someone involved in the lending process.  The only practical, reliable way to beat the bank lies in finding those injures, and then attacking the injurious parties, demanding a settlement beneficial to you under threat of suing.  And this remains true even if you have lost your home by relying on a scheming foreclosure pretense defense attorney.

Most borrowers need a competent professional mortgage examination team to review their loan-related documents in a search for evidence of injuries.  Such evidence constitutes the “silver bullets” needed to subdue a lender “werewolf” in a negotiated settlement or lawsuit.  And that is the ONLY methodology that works reliably.

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For more details, visit the Mortgage Attack web site.  Then Call Me or email me for help.

Bob Hurt

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How a Securitization Audit Wastes Foreclosure Victim Money

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Bob Hurt, Writer

By Bob Hurt, 15 February 2012, Reissued 4 June 2015

Clearwater, FL                                                  For Immediate Release

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NOTE (added on 4 June 2015):  Go to these web sites to learn how securitization auditors and their gimmicky sales outfits spread the Black-Hearted LIE that their worthless products have some value:

  1. http://MortgageAttack.com
  2. http://LivingLiesTheTruth.com

As the article below and my comments in response to naysayers prove, securitization audits give ZERO value to mortgage victims and foreclosure victims.

I give my phone number and email contact at the end of the article.  USE it if you have a mortgage problem and face foreclosure.  READ the content at the two sites I linked above.

Remember:  you are an idiot if you waste money on a securitization audit.  I made this point gently more than 3 years ago, and the point has even more truth today because I HAVE WARNED YOU.

DON’T be an idiot.  DEMAND a refund.  Report the auditor as a scammer to the state Attorney General.

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A truly crazy craze has hit the foreclosure defense communities of America.  It goes by the name of “securitization audit” or some variation thereof.  The nature of the securitization audit service is such that only the crazy will foolishly waste money on it.

Okay, so we cannot fairly call ignorant foreclosure victims “crazy.”  Why?  Because they cannot easily know that a securitization audit is just another scam intended to bilk them out of yet more money they cannot afford for a service they cannot use.  Except perhaps to replace the old Sears Catalog in their outhouse.

So, let’s just say most foreclosure victims are uninformed about the uselessness of securitization audits.  Obviously.  Otherwise they wouldn’t keep wasting money on them.

So, we have undertaken this “press release” to inform the uninformed so they will not waste their hard-earned money on useless Securitization Audits.

Let us start by explaining the nature and alleged purpose of the securitization audit.  Then we shall analyze its achievement of the purpose.


What is Securitization? Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling said consolidated debt as bonds, pass-through securities, or Collateralized mortgage obligation, to various investors. The principal and interest on the debt, underlying the security, is paid back to the various investors regularly. Securities backed by mortgage receivables are called mortgage-backed securities, while those backed by other types of receivables are asset-backed securities.


What is a Securitization Audit?  The securitization audit consists of the activity of compiling a report of the rules and agreements regarding securitization, and the trail and timing of assignments of beneficial interest in the note and mortgage from the loan originator to the party foreclosing the loan for non-payment.


What is the Purpose of a Securitization Audit?  The audit service provider alleges that foreclosure victims can use the audit to stop the foreclosure or cloud the title by proving that the foreclosing party does not have the right to foreclose.

Does the Securitization Audit Fulfill this Purpose?  NO, it does not, Statistically, NEVER.

Why Doesn’t the Securitization Audit “work”?  The Securitization Audit does not work because it does not change the essential facts of the case:

  1. The borrower signed a note and mortgage giving the lender the right to sell the loan and the owner of the loan to foreclose the loan for non-payment and force a foreclosure sale of the mortgaged realty
  2. The lender lent the funds to the borrower
  3. The borrower used the funds to buy residential realty
  4. The borrower took possession of the residential realty and occupied it.
  5. The borrower started paying payments according to the note’s requirements
  6. The borrower stopped making timely payments
  7. The loan servicer called the note due and payable, giving notice to the borrower
  8. The note assignee or mortgagee have the right to foreclose according to the terms of the note and mortgage.

What Vital Thing Doesn’t the Securitzation Audit Do?  The Securitization Audit does not question whether or to what extent the following “Deal-Killer” flaws underlie the Note and Mortgage:

Tortious conduct of the lender or agents in making the loan.  Examples:

  1. Loan application tampering by the mortgage broker;
  2. Over-valuation of the realty by the appraiser.
  3. Breaches of the note or mortgage contract by the lender or lender’s agents.
  4. Violation of any a variety of laws/regulations that justify fine or rescission of the loan.

You see, the Securitization Audit service provider claims that the foreclosure victim can use the audit to stop the foreclosure dead in its tracks.  Some providers imply the foreclosure victim can get the house free and clear.

Why Does the Securitization “Miss the Boat” for Foreclosure Victims?   The Securitization Audit ignores the factors that could constitute a cause of action against (reason to sue) the lender.  Such a cause of action, equivalent to predatory lending, could make the lender squeal for a settlement to avoid a nasty, noisy lawsuit.  The lender knows that a public lawsuit would tarnish the lender’s reputation and make other victims clamor for suit or settlement awards.

What is the Core Problem of the Securitization Audit Strategy?  The securitization Audit service provider tries to focus the foreclosure victim’s attention on the problems with the foreclosure of the loan rather than the problems with the loan itself.  It presumes the loan has validity, a terrible strategic and tactical blunder.  Personal injury attorneys can much more easily prevail against a predatory lender who cheated the borrower when making the loan, than can foreclosure defense attorneys prevail against the lender for some foreclosure flaw.

Why Can’t a Foreclosure Defense Attorney Use the Securitization Audit?  The foreclosure defender has no use for the securitization audit for several reasons.

  1. The judge focuses on the INJURY TO THE PLAINTIFF in a foreclosure lawsuit, or to the Defendant in a quiet title lawsuit in non-judicial foreclosure (deed of trust) states.  The judge will cause the court to redress the injury.
  2. The typical Securitization Auditor cannot function in court as an expert witness, for want of qualification. So the audit’s information will not get entered into evidence because no expert can testify to it.
  3. The judge can plainly see any information about securitization which the SEC or lenders and others in the securitization process have posted on the world wide web for the whole world to see with a web browser.  Such “self-authenticating” evidence tells the story of who assigned the note to whom
  4. Whoever shows up with the note can foreclose it, so the Securitization Audit has no effect on that.
  5. Even if the judge dismisses a case for robo-signing, wrong plaintiff, etc, the bank ALWAYS corrects the documents and either re-files or appeals the case, and, statistically, the bank always wins the foreclosure regardless of what the foreclosure defense attorney does.
  6. The mortgage, which the borrower signed, plainly gives the lender or nominee (mortgagee) the legal right to force a foreclosure sale for no-payment of the note.
  7. In Deed of Trust states, the trustee will foreclose


Does the Use of a Securitization Audit Delay Foreclosure?  In a non-judicial foreclosure (deed of trust) state, the audit data will not stop or delay the foreclosure.  In judicial foreclosure states, the audit data might contains information about robo-signing or improper assignment.  In that case, the judge might dismiss the case.  But this only delays, and does not stop, the foreclosure.  Eventually, the foreclosure plaintiff will re-file the case after correcting the documents, and the court will grant the foreclosure.


Do Foreclosure Defenders Successfully Argue Against Split of Note from Mortgage? Some Foreclosure defense attorneys will argue that the securitization splits the note from the mortgage, and that gives neither the owner of beneficial interest in the note nor the mortgagee the standing to force a foreclosure sale.  They argue that the mortgagee did not get injured by non-payment, and the note interest owner’s name doesn’t appear on the mortgage, and therefore the court can order foreclosure, but not sale of the mortgaged realty.

Why Doesn’t The Court Buy that Argument?  Trial and appeals courts rule against this argument consistently. You can see why in this excerpt from the US Supreme Court in Carpenter v. Longan, 83 U.S. 16 Wall. 271 (1872):

“The mortgaged premises are pledged as security for the debt. In proportion as a remedy is denied the contract is violated, and the rights of the assignee are set at naught. In other words, the mortgage ceases to be security for a part or the whole of the debt, its express provisions to the contrary notwithstanding.

“The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity”


Why Do Foreclosure Courts Nearly Always Grant the Foreclosure?  The Court MUST give relief and remedy to the injured party, the lender or assignee.  Period.  The borrower breached the note contract.  The breach injured the lender.  The mortgage requires that the borrower must pay off the note or forfeit the realty.  The Court will order the use of the proceeds of the foreclosure sale to pay off the note.  The Court will give the borrower the balance after payoff of liens, or it will award a deficiency judgment to the lender.

The Court MUST do this.

The Securitization Audit, even in the hands of a highly skilled attorney, cannot avoid this hard-core reality of contract law.  Look at just a few court rulings that prove this point:

  • “[S]ince the securitization merely creates a separate contract, distinct from plaintiffs’ debt obligations under the Note and does not change the relationship of the parties in any way, plaintiffs’ claims arising out of securitization fail.”  Lamb v. MERS, Inc., 2011 WL 5827813, *6 (W.D. Wash. 2011) (citing cases); Bhatti, 2011 WL 6300229, *5 (citing cases);
  • In re Veal, 450 B.R. at 912 (“[Plaintiffs] should not care who actually owns the Note-and it is thus irrelevant whether the Note has been fractionalized or securitized-so long as they do know who they should pay.”);
  • Horvath v. Bank of NY, N.A., 641 F.3d 617, 626 n.4 (4th Cir. 2011) (securitization irrelevant to debt);
  • Commonwealth Prop. Advocates, LLC v. MERS, 263 P.3d 397, 401-02 (Utah Ct. App. 2011) (securitization has no effect on debt);
  • Henkels v. J.P. Morgan Chase, 2011 WL 2357874, at *7 (D.Ariz. June 14, 2011) (denying the plaintiff’s claim for unauthorized securitization of his loan because he “cited no authority for the assertion that securitization has had any impact on [his] obligations under the loan, and district courts in Arizona have rejected similar arguments”);
  • Johnson v. Homecomings Financial, 2011 WL 4373975, at *7 (S.D.Cal. Sep.20, 2011) (refusing to recognize the “discredited theory” that a deed of trust ” ‘split’ from the note through securitization, render[s] the note unenforceable”);
  • Frame v. Cal-W. Reconveyance Corp., 2011 WL 3876012, *10 (D. Ariz. 2011) (granting motion to dismiss: “Plaintiff’s allegations of promissory note destruction and securitization are speculative and unsupported. Plaintiff has cited no authority for his assertions that securitization has any impact on his obligations under the loan”)

Do you see?  Securitization has no relevance to whether the borrower owes and must pay the debt or the mortgagee may force a foreclosure sale.

What If I Want to Buy a Securitization Audit Anyway?  Securitization issues have such an esoteric and arcane nature that NO FORECLOSURE VICTIM SHOULD EVER PURCHASE a securitization audit.  Only the foreclosure defense attorney should obtain a review and analysis of securitization issues, IF and ONLY IF the attorney considers it  necessary to advance the client’s cause.

What Do Foreclosure Defense Attorneys and others Say?

  • Matt Weidner, Matthew Weidner Law Firm, St. Petersburg, Florida

We all need a real discussion here about whether loan audits have any value at all.  Let me be clear, 100% clear again….

IF A LOAN AUDITOR OR REVIEWER CANNOT BE QUALIFIED AS AN “EXPERT” BY A JUDGE AN AUDIT HAS ZERO VALUE

Too many clients have blow thousands of dollars on something that is totally worthless…if the person who prepared the report cannot be qualified as an expert over the strenuous objection of counsel, it just does not get in. And getting an “expert” qualified is next to impossible in this area.

http://mattweidnerlaw.com/blog/2012/01/loan-and-securitization-audits-are-a-waste-of-money-if-they-cannot-be-admitted/

We’re all like scientists cracking a very complex code.  Now, too many people get involved with loan audits or securitization reviews THAT HAVE ZERO VALUE.  ZERO VALUE. ZERO VALUE.

One thing everyone must keep in mind is that if whomever does an “audit” (whatever the heck that means) cannot be qualified as an expert in a court of law, THE AUDIT HAS ZERO VALUE.  The court will not consider one single word on the page.  So for everyone out there selling audits and for everyone out there thinking about using any of this garbage, you must ask whether the report can be qualified as an expert.

http://mattweidnerlaw.com/blog/2012/01/lynn-syzmoniaks-fraud-digest-dissecting-ahmsi/

  • Mark Stopa, Stopa Law Firm, Tampa Florida

I asked for a copy of the audit, and, weeks later, I received literally dozens of pages of incomprehensive gobbley-gook.  It wasn’t even written in English – it was random numbers thrown together in a completely nonsensical way.  There’s no way any judge could read those documents and see that the Note/Mortgage had been 85% paid.  Heck, I couldn’t read those documents and conclude as much, and neither could my client.

My point, simply, is that before any homeowners rush out to pay for an audit, they should be aware of what’s required for that audit to do them any good in their court case.

http://www.stayinmyhome.com/blog/2012/01/a-foreclosure-audit/

  • Brian Caputo, Canupp Law

In the last 6 weeks I have met with three families that had paid up to $2,100.00 for an audit.  All three of these “audits” were three ring binders filled with documents from the Securities and Exchange Commission Home page and articles from the newspaper detailing successful mortgage defense decisions.  These products are problematic for a number of reasons:

  1. The documents from the SEC are free and available to the public.
  2. The newspaper stories, while informative, cannot be used as precedent to a judge.
  3. The analysis does nothing to breakdown what has happened with your payments after they were received by the Mortgage Company.
  4. The “expert” who is rendering the opinion would never be accepted by a court to testify in an expert capacity.
  5. The analytical process supporting the audit conclusion is flawed and that leads to an impossible opinion.
  6. None of the analysis brought to me by clients have included a review of the money paid by the homeowner.

As of today most judges in state courts and bankruptcy courts have not had a chance to fully grasp the ongoing fraud regaring the securitization process and the documents necessary to forclose upon a home.  Arguments made on “note ownership” alone often prove to be unsuccessful in court.  However, when you appear before the judge and you are able to support securitization or note ownership arguments, with evidence that also supports shenanigans with the loan payments– your legal hurdles will be much easier to cross.  As a rule, judges and juries do not have to be taught about why the misapplication of money is illegal!

http://canupplaw.com/2011/05/homeowners-now-being-cheated-by-mortgage-auditors/


Scambusters

Fraudsters are using a documents-checking process known as a mortgage securitization audit as a means of scamming foreclosure-threatened homeowners… Even when the process is legitimately carried out, the Federal Trade Commission suggests it’s worthless.

http://www.scambusters.org/mortgagesecuritization.html

How Do I Choose between Securitization Audit and Mortgage Fraud Examination?  Imagine yourself as a foreclosure victim, or a homeowner with an “under-water” mortgage, one where you owe the mortgage company more than the value of the house.  You have $1500.  You want to spend it wisely to fight the foreclosure.  Where to you spend it?  Do you spend it on a mortgage fraud examination service, or on a securitization audit?

As the foregoing expose’ has revealed, only a fool would spend it on the audit because the audit will not stop the foreclosure and will not get you the house free and clear or a cash settlement, and the typical foreclosure does not have the skill to select a good service provider, determine the merit of the audit, or use the audit effectively if at all in a foreclosure defense.

Do Foreclosure Defense Attorneys Commit Malpractice?  Some professionals in the mortgage-related industries believe attorneys defending a contract breach complaint commit malpractice IF they don’t aggressively examine the mortgage-related documents for evidence of fraud, tortious conduct, contract breaches, and other violations.  It takes a lot of work and skill to do that, skill most lawyers don’t have.  So, most foreclosure defense attorneys only want to drag out or delay the foreclosure, a violation of the rules regulating the bar and simple business ethics.  Typically such “pretender defenders” charge $1500 to $2500 “retainer” (gift) to get started, plus $500 to $1000 a month for as long as they keep the foreclosure victim in the house.  They typically know the victim will eventually lose the house within 6 to 24 months.  The victim could have saved that money and took a keys-for-cash deal from the lender without paying a lawyer, and had enough money altogether to buy a house free and clear at a foreclosure auction. Foreclosure victims don’t need a lawyer to do that.


Why Should I Buy a Mortgage Fraud Examination?  You ought to spend the money on a mortgage fraud analysis because with the evidence in the corresponding report, the court might rule that the lender or lender’s agent defrauded you or breached the contract.  If so, the Court might order the lender to pay you treble damages.  Why?  Because the Court must redress YOUR injury.  The damages award might provide you with enough money to justify a rescission order by the court.  If it does, you might get your house free and clear to settle the damage claim, or a hefty cash award to reduce your loan balance.  And the jury might award you punitive damages sufficient to let you retire at a young age.

For proof, see the West Virginia Quicken Loans case where the court ordered the foreclosure victim punitive damages of $2.1 million, plus the house free and clear, and all attorney fees paid.


How Do I Find a Competent Mortgage Fraud Examiner?  You find a competent mortgage fraud examiner by calling me, Bob Hurt at 727 669 5511, or just Email Me.  The Chief Examiner, a personal friend of mine, has 38 years’ experience examining and analyzing legal documents in order to find fraud, tortious conduct, breaches, and other violations and flaws.  Nobody on the planet does a better job of examining the mortgage and foreclosure related  documents and preparing a report that any competent attorney can use to demand a settlement from or sue the lender.

Can I Use the Mortgage Fraud Examination Report Even if My House is in Foreclosure?  Yes, you can.  In fact, it makes a lot of sense to do so if you have purchased or refinanced your home within the past 10 or 12 years.  People who can make a mortgage payment can also usually feel less financial pressure, so they can typically find a way to pay an attorney for a couple of hours of work to negotiate a settlement with the lender.


Mortgage Attack LogoWhat Kind of Attorney Should I Use To Settle or Sue?  If the examination report reveals a cause of action sufficient justify suing, you should seek out a competent personal injury, tort, or contract attorney to negotiate settlement with or to sue the lender.  It makes more sense to negotiate the settlement, and then to sue only as a last resort.


How Do I Order my Mortgage Fraud Examination Report? 
To order your examination and report, CALL for a Mortgage Fraud Examination at this number NOW:

 

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Phone Me!
727 669 5511

Bob Hurt

727 669 5511 

Click Here to E-mail Me

Learn how to attack the validity of the loan at http://MortgageAttack.com.